With the lead up to June 30 being a busy time for many of us, please feel free to review the Legislative changes that took effect July 1 2012.

Personal Tax Rates

The updated income tax thresholds and tax rates for residents (excluding the 1.5% Medicare levy) are:

 

2011-2012 Income year - current

2012-2013 Income year

Taxable income

Rate

Taxable income

Rate

($)

 

($)

 

0 - 6,000

0%

0 – 18,200

0%

6,001 -37,000

15%

18,201 - 37,000

19%

37,001 -80,000

30%

37,001 - 80,000

32.5%

80,001 - 180,000

37%

80,001 - 180,000

37 %

180,001

45%

180,001

45%

Date of effect – 1 July 2012

Tax-Free Threshold Increase

The individual tax-free threshold has been increased from $6,000 (previously) to $18,200.

Date of effect – 1 July 2012

 

Removed Flood Levy

The flood levy only applies to taxable income derived from 1 July 2011 to 30 June 2012.

Date of effect – 30June 2012

 

Low Income Tax Offset Decrease

Individuals will be entitled to receive the Low Income Tax offset (LITO) if their taxable income is below $66,667. The low income tax offset will decrease from $1,500 to $445 and will be phased out at the rate of 1.5 cents for every dollar of taxable income over $37,000.

 

 

Current 2011-2012

From 1 July 2012

Offset

$1,500

$445

Effective tax free threshold

$16,000

$20,542

Maximum tax-free distribution to a minor

$416

$416

Date of effect – 1 July 2012

 

Increase to Medicare Low-Income Thresholds

The Medicare levy low-income thresholds will beincreased to:

  • $19,404 for individuals and
  • $32,743 for members of a family

The additional amount of threshold for each dependent child or student has also increased to $3,007. The increase in these thresholds ensures that low income families and individuals are not liable to pay the Medicare levy.

The Medicare levy threshold for pensioners below Age Pension age will increase to $30,451.

Date of effect - 1 July 2011

 

Superannuation – Concessional Contributions

The concessional (before-tax) contributions cap was reduced from $50,000 to $25,000 for all ages, including members aged over 50.

Date of effect – 1 July 2012

 

Superannuation Guarantee Rate Increase

The superannuation guarantee rate has been progressively increased from 9% to 12%, from 1 July 2013 to 1 July 2019.

There will be a phased increase to 12% with a three year lead time from announcement date.

 

Year

Rate

2013-2014

9.25

2014-1015

9.5

2015-2016

10

2016-2017

10.5

2017-2018

11

2018-2019

11.5

2019-2020

12

The maximum age limit for the superannuation guarantee, currently 70 years, has been abolished.

Date of effect – 1 July 2013

 

Increase Tax Rate for Concessional Contributions for High Income Earners

Individuals with an income greater than $300,000 will see their concessional(before-tax) superannuation contributions taxed at the rate of 30%, previously 15%.

If an individual’s income excluding their concessional contributions is less than $300,000, but the addition of their concessional contribution raises them above this threshold, the 30% tax rate will only apply to that part of the contribution in excess of $300,000.

 

Date of effect – 1 July 2012